From Raven SEO:
Live Search is offering a new way for AdWords customers to get click-throughs — their own natural SERPs. They appear to be indexing AdWords ads from Google’s own SERPs. Doing a search on Live for colorations paint (at the time of this writing) will give you AdWords ads in the third and fourth natural result. I can only assume this is unintentional and is simply a bug in their crawler. Regardless, it’s a little embarrassing.
Jeff: It’s not a mistake….its the holiday season! A season of giving…better to give than receive, right Steve Ballmer?